The Disclosures Required in AASB 1023 in Relation to Liabilities

question 26

Multiple Choice

The disclosures required in AASB 1023 in relation to liabilities for outstanding claims include.

• A) The percentage margin adopted in determining the outstanding claims liability.
• B) The component related to the risk margin.
• C) The central estimate of the expected present value of future payments for claims incurred.
• D) The process used to determine the risk margin, including the way in which diversification of risks has been allowed for.
• E) All of the given answers.

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Definitions:

Capital

Capital refers to financial assets or the financial value of assets, such as funds held in deposit accounts, as well as the physical factors of production – namely, machinery, buildings, and land.

Expected Profit Rate

The forecasted rate of return on an investment or business venture, based on estimated earnings.

Gross Domestic Product (GDP)

The complete value, in monetary or market terms, of all the goods and services that are finalized within the territorial boundaries of a country within a particular period.

Investment

Allocating financial assets in hopes of achieving a return or profit.